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Kansas or California as a Model for America’s Future Growth?

Flickr/David Yu

By The Fiscal Times Staff

October 19, 2018

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If you had to choose either Kansas or California to serve as a model for America’s future growth, which would it be, Bloomberg’s Barry Ritholtz asks. The answer, he argues, is obvious — yet President Trump has chosen poorly:

Trump has championed the Kansas model of deregulation, tax cuts and antipathy to immigrants. … California is far from perfect, but you can't deny the success of its economy. Ignoring this reality, Trump has instead embraced what we might call Kansasification of America. Taking a page out of former Governor Sam Brownback's playbook, the U.S under Trump has put into place the same sorts of tax and regulatory incentives that Kansas did circa 2012. …

Trump wants more tax cuts, which would only dig a deeper debt hole. The CBOprojects the federal debt will reach 100 percent of GDP by 2028. Despite the promises, the Trump tax cuts are not paying for themselves, much less “paying down the national debt,” as Treasury Secretary Steven Mnuchin promised they would. Sometimes taking on debt makes sense, especially when used to counter an economic slowdown or pay for things like infrastructure. Tax cuts that do neither and are tilted to advantage the already well-off are likely to limit the nation's ability to cope with future recessions and make needed investments.